Internal Control Questionnaire

for the Expenditure Cycle

Process, Control Objectives, Is the design of company controls
Risks, Control Activities adequate to meet the objectives?

Requisitioning
Control Objective: accurately identify needs given budget constraints and address them on
a timely basis
Risks: unecessary goods may be requested, requests may exceed available resources,
requisitions may be lost or filled on a timely basis
Control Activitites:
1. Are needed goods identified by someone who
actually needs or uses them? Yes Partially No
2. Does the company use reorder points monitored
by their computer? Yes Partially No
3. Do they have a purchase requisition form of
some type (written or computer)? Yes Partially No
4. Does a Department head review and approve
requests for goods in relation to a budget or other
form of management control? Yes Partially No
5. If they have requisitions,
a) are they pre-numbered? Yes Partially No
b) do they track them? Yes Partially No

Purchasing
Control Objective: ensures that needed quality goods are ordered and received on a timely
basis from qualified vendors at the best price
Risks: inadequate vendor screening or vendor favoritism, poor quality, excessive prices, order
not filled or filled on a timely basis
Control Activitites:
6. Do they investigate and update vendor capabilities regarding
product quality and capacity, price, order lead time requirements,
current and former customer satisfaction, financial condition,
management stability, and any pending litigation? Yes Partially No
7. Do they identify alternate vendors? Yes Partially No
8. Do they do long-term needs analysis? Yes Partially No
9. Is there an approved vendor list? Yes Partially No
10. Do they use a purchase order form? Yes Partially No
11. Is the purchase order pre-numbered? Yes Partially No
12. Are open purchase orders tracked and reviewed
for timely follow-up? Yes Partially No
13. Are purchase orders authorized by approved
purchase requisitions? Yes Partially No
14. Is there a code of ethics for purchasing that
addresses conflicts of interest. Yes Partially No
15. Do they get competitive bids through RFQ’s? Yes Partially No
16. Do they evaluate vendor performance? Yes Partially No
Receiving
Control Objective: properly identifies received goods and safeguards them.
Risks: lost receiving records, shortages or damaged goods may not be detected, receiving
records may be inaccurate, inadequate physical security over goods received
Control Activitites:
17. Do they use a separate receiving report to track
received goods? Yes Partially No
18. Is the receiving report pre-numbered? Yes Partially No
19. Do the receiving clerks inspect incoming goods
for damage? Yes Partially No
20. Do the receiving clerks actually count the goods? Yes Partially No
21. Are the receiving clerks prevented from copying
the quantity from the purchase order? Yes Partially No
22. Do they maintain good physical security over goods? Yes Partially No

Accounts Payable
Control Objective: keep track of who to pay, how much, and when
Risks: the wrong vendor may be paid or the proper vendor may not be paid, the amount paid
may be incorrect, may not be paid on time, or may be paid for goods that were not ordered or
received
Control Activitites:
23. Do they use a pre-numbered voucher to establish
control over incoming invoices? Yes Partially No
24. Do they match invoice quantities to a copy of a
receiving to ensure they do not pay for more goods
than were actually received? Yes Partially No
25. Do they match invoice descriptions to a copy
of the purchase order to ensure that they do not
pay for goods they did not order? Yes Partially No
26. Do they perform a math check on the invoice’s
extensions and footings? Yes Partially No
27. Do they ensure proper distribution of invoices
by reference to a chart of accounts with clear descriptions? Yes Partially No
28. Are the invoices approved for payment by the person
or department that requested them in order to ensure that
the items are of acceptable quality? Yes Partially No
29. Are adequate computer edit checks performed on
input to ensure that erroneous data is not entered into
the computer(e.g., check digit, field check, completeness)? Yes Partially No

Cash Disbursements
Control Objective: pay authorized suppliers the correct amount at the proper time and
ensure that the transactions are recorded accurately, completly, and in the proper period
Risks: inaccurate, untimely, or unavailable information regarding vendors or payment due
dates, fictitious documentation is created, supporting documents are reused, supporting
documents are not reviewed, invoices are paid late
Control Activitites:
30. Do they ensure that only valid and authorized vendors
are added to the vendor master file? Yes Partially No
31. Do they use pre-numbered checks? Yes Partially No
32. Are the people who handle checks separated from
accounting record keeping responsibilities? Yes Partially No
33. Are the check signers segregated from other
accounting responsibilities? Yes Partially No
34. Do they have second signatures on large checks
to reduce the likelihood of embezzlements? Yes Partially No
35. Does the check signer properly review the
supporting documentation before signing the checks? Yes Partially No
36. Is the supporting documentation canceled as
paid to ensure that it is not used again? Yes Partially No
37. Do the check signers ensure that the checks
are mailed to ensure that persons inside the company
do not improperly receive company funds? Yes Partially No
38. Do they maintain adequate security over
any signature plates? Yes Partially No
39. Do they reconcile the bank accounts on
a regular basis? Yes Partially No
40. Does the person who reconciles the bank accounts
approve transactions or have access to cash? Yes Partially No